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Thu August 8, 2013
California's New Rules Could Change The Rideshare Game
Originally published on Thu August 8, 2013 8:55 am
By now, you've probably heard of Internet-based ridesharing apps like Uber and Sidecar that let you hail a ride with the touch of a screen. They're often cheaper than taxis and because of that, they're in most major cities and their popularity is booming.
For years, cities and states — bodies that regulate transportation — have struggled to figure out what to do about them. Recently, California took the first steps towards legitimizing them.
In Los Angeles, Lyft is one of the biggest ride-sharing companies.
One of its most popular drivers is Jimmy Lucia, who goes by "Batman" and even dresses the part. In his day job, Lucia is actually an aspiring actor and movie director. Driving for Lyft is just a way to make a little extra income — even though, technically, the Dark Knight may be doing so illegally. There's a cease and desist order for Lyft and other ridesharing companies in L.A., inspired largely by taxi drivers, their business rivals. They complain companies like Lyft are just unregulated modes of public transportation. It's a battle that's playing out in other cities from Washington, D.C., to Washington state.
"It's eating into our business. They're providing essentially the same service that we are without complying with all of the regulations that we have to comply with," says William Rouse, general manager of Los Angeles Yellow Cab, an operation with more than 1,000 taxis in the greater L.A. basin. He says that by dodging those regulations — like emissions standards and fare limits — the app-based companies have an unfair advantage.
"All of our local governments mandate that we charge a set fare. We are not allowed to discount," Rouse says.
The rideshare companies are allowed to discount. Their fares are usually cheaper by about 20 percent. Rouse says that needs to be regulated for taxis to compete.
Enter the California Public Utilities Commission. The PUC recently proposed a set of rules for rideshare companies — insurance requirements, driver background checks, drug tests. It also puts all of the companies under a new legal label: Transportation Network Companies, or TNCs — not taxis.
Rouse thinks that's wrong. They collect fares, they meter rides — in his mind, they're taxis.
"You'd think if it looks like a duck and walks like a duck, it's probably a duck," he says, "but the PUC thinks it's probably a giraffe. I don't know."
'Tides Are Turning'
The PUC still has to finalize those rules in September, but tech companies are taking the proposal as a win. John Zimmer is one of the co-founders of Lyft. He says that the PUC has set a precedent that others can follow nationally and he thinks that they will. He's been contacted by mayors, asking him to expand into their cities.
"I think the tides are turning. I think that people are realizing that we can improve safety for transportation, we can improve affordability for transportation, we can improve efficiency in transportation, and that's a good thing," Zimmer says.
Zimmer thinks that those things can happen alongside taxis. They can coexist. But driving with Lucia, you see that there's still a ways to go. He drives by a cab as he's headed to pick up a passenger, and the look he gets from its driver can best be described as steely. (You can tell a Lyft car by the pink mustache attached to the front.)
"I have had a couple of times where they pull up to me, and it looks like they want to say something, but I'm dressed as Batman and they just drive off," he says.
A strategy that's catching on. Nobody messes with the new Darth Vader driver, either.